The United States has long ranked among the most innovative countries in the world. Innovations in any number of fields – from software development and finance to energy storage and biotech – can have profound effects on our day-to-day lives.
Not only is innovation a primary driver of economic growth, but some innovations, like the COVID-19 vaccine, have saved an untold number of lives. Others, meanwhile, like the on-going lithium-ion battery development, may prove critical in reducing global carbon emissions.
The U.S.’s status as a global hub of innovation is partially attributable to public funding of research and development. The federal government spent nearly $138 billion on R&D in 2020 alone. The private sector is also an engine of innovation, from companies on the Fortune 500 to small start-ups. Amazon, for example, spent over $62 billion on R&D in fiscal 2022. (Here is a look at the most innovative companies in 2021.)
Several key indicators reveal that much of the innovation that takes place in the U.S. is concentrated in certain parts of the country. Using an innovation index created by personal finance website WalletHub in its report report Most & Least Innovative States, 24/7 Wall St. listed the 50 states in order from least innovative to most. WalletHub’s index ranks states based on multiple measures indicative of innovation – including patents issued, venture capital funding, entrepreneurship, and employment in STEM (science, technology, engineering, and math) fields. We added some of the data, such as employment in STEM, venture capital investment, and patents issued, using different sources.
Many of the most innovative states are coastal, located along both the Atlantic and Pacific coasts. These places are often notable for their high concentration of large research universities, in addition to being home to major employers in industries ranging from defense to information technology. (Here is a look at 30 inventions that shaped military history.)
Jobs in the STEM fields in these states tend to be higher paying than STEM jobs in states that rank lower on this list. In each of the five least innovative states, for example, the average annual salary among STEM workers is less than $85,000, while in each of the five most innovative states, the average STEM salary exceeds $100,000.